On 15 March, 7 civil society organisations (CSOs) responded to a World Bank consultation on its Business Environment Enabling (BEE) Project, which will replace the discontinued Doing Business Report (DBR, see Observer Winter 2021), with a highly critical submission stressing that the concept note fails to demonstrate that the BEE Project goes beyond a rebranding exercise of the DBR, as it fails to address longstanding criticisms of the Bank’s engagement in private sector advice generally and the DBR in particular. The submission was signed by:
- Asia Pacific Forum on Women, Law and Development (APWLD)
- Christian Aid
- Bretton Woods Project
- European Network on Debt and Development (Eurodad)
- Society for International Development (SID)
- Third World Network (TWN)
The submission highlights that it is unacceptable for the World Bank to embark on a replacement of the much-criticised Doing Business Report without addressing its main flawed assumption: that what is good for the international private sector is automatically good for national economic and social development and people.
As currently designed, the BEE will do nothing to address the challenges that developing countries are facing and going to face in the future – such as the energy transition, the creation of green and decent jobs, and meeting their international human rights obligations – nor will it support the World Bank’s ability to achieve its twin goals of ending poverty and increasing shared prosperity, particularly in the context of the divergent Covid-19 pandemic and the climate and inequality crises.
The group urges the World Bank to abandon the BEE project. Instead, they suggest it takes the following three steps:
1. Before embarking into any new project, the World Bank should review and assess the impact on poverty, inequality and human rights of the implementation of 17 years of DBR-inspired policy reforms, especially in countries that have seen fast and large improvements in their scores. Such a review should be based on reparative justice, led by a diverse committee of domestic and international participants and include the voices of affected communities, from entrepreneurs to the urban poor. This exercise should be accompanied by an investigation of what were the key national and global policy components in the countries where private sector development has been successful on the basis of equitable economic growth, decent work creation and social development and how past DBR policies worked toward or against these cases.
2. The World Bank should undertake a deep exercise of rethinking its understanding of the role of the private sector in development in light of the Covid-19 recovery, and the inequality and climate crises. Such an exercise should aim at setting out a new private sector strategy for the Bank, and ask questions such as:
- What type of a private sector is needed to achieve the SDGs, enable the improvement of states’ ability to meet their human rights obligations and the World Bank’s twin goals of eradicating poverty and sharing prosperity?
- What is the role of the state in this process?
- What types of businesses are needed? How can the World Bank promote a private sector made of sustainable and inclusive business models that favor innovation, are redistributive and regenerative by design and whose purpose goes beyond profit?
- What does a supporting ecosystem for sustainable and inclusive businesses in low and middle income countries look like? What type of regulations, policies, public services and relationship with the state are required?
- When is international trade and inclusion in global value chains beneficial to these processes and when is it harmful and should be limited and regulated?
3. The World Bank should address its deep structural problems and implement the following measures proposed by 130 CSOs in a statement in September 2021:
- End the gentleman’s agreement in the leadership selection process, reform the quota system to give more power to countries from the global south, as well as to economic ideas and policy tools from the global south in an effort to decolonize the World Bank Group’s knowledge systems and decision-making. The use of policy conditionality and other forms of undue influence on the policy space of developing countries must also come to a termination.
- Overcome the ideological bias in favor of neoliberal policies starting with abandoning a ‘private-first’ agenda and adopting a definition of ‘enabling business environment‘ that aims at economic diversification and resilience and properly values people and the planet. Operations must also be fully aligned with the Sustainable Development Goals and international standards on human rights, labor and the environment.
- Review the integrity and independence of the World Bank’s research and technical assistance, and implement reforms that increase its internal and external scrutiny, avoid conflict of interest, ensure exposure to critical analysis, and enable greater transparency and citizen oversight.
- Adopt a ‘do no harm approach’ to its policy advice and lending operations, through systematic Human Rights Impact Assessments. The Bank must also engage in a more proactive way with the human rights framework.